TSMC’s 3nm Tech Drives Chip Prices Up as Giants Line Up

With Apple’s substantial orders at TSMC’s 3nm process node, an increasing number of clients are following suit. Rumor has it that orders are now queued until 2026, and even with TSMC’s production capacity doubling compared to last year, it remains insufficient to meet demand. It is anticipated that the revenue proportion from the 3nm process node will continually rise, expected to exceed 20% of TSMC’s income by 2024.

According to Ctee, seven tech giants including Nvidia, AMD, Intel, Qualcomm, MediaTek, Apple, and Google will gradually adopt TSMC’s 3nm technology. Due to high demand and limited supply, upstream IC design companies have begun to report price increases.

Rumors suggest that Qualcomm’s fourth-generation Snapdragon 8, manufactured with the N3E process, will be priced 25% higher than the previous generation, exceeding $250, marking the first wave of price hikes, potentially triggering subsequent increases. Industry insiders noted that the procurement cost of mobile chips was already high last year, with the third-generation Snapdragon 8 reaching around $200. MediaTek is expected to launch the Dimensity 9400 this year, using the same process, though it remains uncertain whether they will follow Qualcomm’s pricing strategy.

It is understood that the cost of the 3nm process node is approximately 25% higher than the 5nm process node, although this comparison does not consider factors such as chip size, order volume, and design architecture. On paper, Qualcomm’s fourth-generation Snapdragon 8 price increase seems within a reasonable range. TSMC’s President, C.C. Wei, has stated that TSMC’s products offer high energy efficiency and higher yields, making their solutions the most cost-effective considering the cost per chip.

Previous reports indicated that TSMC is considering a price increase, which could further drive up chip prices.